Monday, December 2, 2013

Second District Concludes That Issue of Whether a Uniform Policy Exists is Itself a Common Issue Amenable to Class-Wide Adjudication: Jones v. Farmers Ins. Exchange

On November 26, 2013, the Second District (Division 3) ordered publication of its opinion in Jones v. Farmers Ins. Exchange, __ Cal. App. 4th __ (2013) [2013 Cal. App. LEXIS 955], which concluded the trial court erred in denying certification of an unpaid wage claim based on employee declarations disputing the existence of the alleged uniform company policy underpinning the plaintiff's theory of liability.

At issue was the trial court’s finding that the plaintiff had failed to prove the employer maintained a “company-wide” policy of refusing to compensate employees for certain preliminary tasks despite proffering an employer-issued memo specially stating: “Computer sync time which ordinarily takes minimal time to perform and is not compensable. For example, taking a few minutes to sync your computer, obtaining assignments/driving directions before getting in your car and driving to your first appointment.”  See Slip Opinion, at 3, 6.  In opposing certification, the defendant denied the memo established a uniform company policy of its refusal to pay wages, submitting declarations from 11 current employees asserting that they (1) regularly received their first assignment of the day on the afternoon of the previous workday (i.e. during shift-time which was compensated), (2) were prohibited by company policy from working outside of their scheduled shifts without prior authorization, and (3) could request approval for compensation for additional time if they needed to prepare for an early morning appointment.  Id., at 6-7.  Relying on such declaration testimony, the trial court concluded that common issues did not predominate because such testimony negated the plaintiff’s assertion that the defendant had employed a uniform policy of refusing to compensate employees for such tasks.  Id., at 8. 

For several reasons, this analysis was deemed to be in error.

First, as explained by the Court, testimony from individual employees denying having been subjected to an alleged policy does not alter the common “liability” issue of whether a uniform policy exists; rather, such evidence only establishes that there may be individualized issues relating to damages:
[Farmers] filed declarations by APD claims representatives and others stating generally that they were not required to perform unpaid preshift work, that they requested and received approval to work overtime if necessary, and that the time required to start up their computers in the morning and access the ServicePower program was minimal.
Farmers's evidence concerns the existence of a uniform policy denying compensation for preshift work, which is a common question amenable to class treatment, as we have stated.  Its evidence also goes to individual issues concerning the right to recover damages, which do not preclude class certification. (Sav-On, supra, 34 Cal.4th at p. 334; Faulkinbury v. Boyd & Associates, Inc. (2013) 216 Cal.App.4th 220, 235, 237 []; Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, 1301–1307 [] (Jaimez); Ghazaryan v. Diva Limousine, Ltd. (2008) 169 Cal.App.4th 1524, 1536 [].)
Slip Opinion, at 13-14.

Second, the Court further reasoned that by relying upon such employee testimony to conclude that a uniform policy did not exist, the trial court not only improperly disregarded the plaintiff’s theory of liability in evaluating the element of predominance, it improperly rendered a ruling on the merits of that theory:
We conclude that the trial court applied improper criteria by focusing on individual issues concerning the right to recover damages rather than evaluating whether the theory of recovery is amenable to class treatment. (Jaimez, supra, 181 Cal.App.4th at p. 1299 [“The trial court misapplied the criteria, focusing on the potential conflicting issues of fact or law on an individual basis, rather than evaluating ‘whether the theory of recovery advanced by the plaintiff is likely to prove amenable to class treatment’”].)  We also conclude that substantial evidence does not support the court's finding that common issues do not predominate. (Bluford v. Safeway, Inc. (2013) 216 Cal.App.4th 864, 871 [] [held that in light of the plaintiff's theory of recovery based on uniform policies and procedures denying drivers compensation for rest periods, the trial court's conclusion that common issues did not predominate was not supported by substantial evidence].)  Plaintiffs' theory of recovery based on the existence of a uniform policy denying compensation for preshift work presents predominantly common issues of fact and law.  Farmers's liability depends on the existence of such a uniform policy and its overall impact on its APD claims representatives, rather than individual damages determinations. (Jaimez, supra, at p. 1300.)  Moreover, the trial court erred to the extent that its ruling was based on its evaluation of the merits of Plaintiffs' claim as to the existence of such a uniform policy. (Ibid.)
Slip Opinion, at 14-15.

Thus, the Jones opinion not only reinforces the well settled proposition that employee declaration testimony at best can establish the presence of individualized damages issues where a uniform policy is alleged [see prior discussion of the decisions in Benton v. Telecom Network Specialists,   Faulkinbury v. Boyd & Associates, Inc., and Bradley v. Networkers International, LLC], it underscores the logical proposition that a theory of liability premised on the existence of an alleged uniform policy is by nature a common issue, even if disputed by the employer.

No comments:

Post a Comment